Gordon Brown dismissed his Government's recent woes as "short-term fluctuations" today as he used the promise of sweeping welfare reforms to launch his political fightback in front of an audience of business leaders.

He also vowed to press ahead with controversial moves to expand Heathrow airport, build new nuclear power stations and streamline the planning system for major infrastructure projects.

In his first speech to the Confederation of British Industry as Prime Minister, Mr Brown told the CBI that there would be far-reaching reforms of the welfare state and the education system which would help “move claimants from passive recipients of welfare benefit to active job and skill seekers”.

“Let us face facts - as a result of changes in the global economy, many of the jobs British workers do now are becoming redundant,” he said. “Of today’s six million unskilled workers in Britain, we will soon need only half a million - over five million fewer.

“We have nine million highly qualified workers in Britain, but the challenge of the next 10 years is that we will need 14 million - five million more.”

The Prime Minister said he had asked John Denham, the Skills Secretary, and Peter Hain, the Work and Pensions Secretary, to forge an alliance of businesses, colleges and the education and voluntary sectors to drive forward the necessary changes.

But the Prime Minister got a rough ride from some of the CBI delegates during a question-and-answer session after his speech.

One, Bernard Howard, a 70-year-old farmer and haulier from Northamptonshire, emerged from the sharp-suited ranks to deliver an impassioned tirade against the “fiasco” of Mr Brown’s Government and to demand the resignation of Alistair Darling, the Chancellor.

Amid increasing concern about the state of the economy and the fate of more than £20 billion of taxpayers’ cash used to prop up the ailing bank Northern Rock, Mr Brown insisted the Government had taken the “difficult decisions” to get inflation on track with tough public sector pay awards.

He added: “At the same time, when we have had to deal with the fallout from global turbulence with events at Northern Rock, we have taken difficult decisions to steer a course of stability and protect the taxpayer which have led to today’s announcement by the company of a preferred bidder.”

This morning Sir Richard Branson’s Virgin consortium was confirmed as the preferred bidder for the troubled mortgage lender.

Mr Brown went on that he would not take short-term measures to combat the current financial situation.

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